Hard times hit Cave Creek Town Hall

Friday’s layoffs underscore financial uncertainty as feds discuss economic stimulus for job creation
CAVE CREEK – On Friday, Cave Creek had to say goodbye to seven employees, equating to 14 percent of the town’s workforce, in light of the economic conditions currently plaguing the entire country.

With Arizona heading up the top ten list of the housing bust, Cave Creek saw a 75 percent decline in development in 2007 that continued to decline through September 2008 when applications came to an abrupt halt.

Municipalities only have three means of collecting revenue; sales tax, property tax and development fees. Cave Creek does not have nor does it wish to impose a property tax.
With no revenue from development, the town is relying on sales tax. The bit of good news though, according to Town Manager Usama Abujbarah, sales tax is up slightly from last year.

Workforce reductions appear to have affected just about every department with the elimination of the following positions:

The laid off employees, whose service ranged from one to nine years, were each given one to three month’s severance pay, depending on their length of service.

When asked if this is all the town will need to do, Abujbarah said the town can’t make promises and is monitoring the budget very carefully.

However, he did say the town will need to cut donations to community service organizations such as the library, museum, chamber, etc. by 50 percent.

Additionally, Abujbarah said the town’s annual Christmas Party will be pot luck rather than its usual gala event this year and council will be asked to rescind its stipend ($300 per month per council member and $500 per month for the mayor) at the December council meeting.

It appears the U.S. House of Representatives is attempting to respond to the downturn in the economy, as evidenced by last Monday’s e-mail from MAG (Maricopa Association of Governments).

MAG, responding to the National Association of Regional Councils (NARC), asked Cave Creek and other member agencies to submit a list of projects and associated costs in preparation for the U.S. House Committee on Transportation and Infrastructure hearing.

The hearing held last Wednesday was on “Investing in Infrastructure: The Road to Recovery,” in which the Committee examined how infrastructure investment contributes to job creation and economic recovery while addressing infrastructure projects under the Committee’s jurisdiction.

Cave Creek submitted its list of projects and associated costs, which included scheduled road paving, Cave Creek Road and Carefree Highway intersection improvements, Carefree Highway improvements, the new wastewater treatment plant, water system improvements and other infrastructure projects the town is either ready or near ready to start.

On Sept. 26, 2008, by a vote of 264-158, the House passed the Job Creation and Unemployment Relief Act of 2008 (HR 7110) to provide $61 billion in additional funding, including $30 billion for programs under the Committee’s jurisdiction for highways, bridges, transit, rail, aviation and environmental infrastructure.

Committee staff estimates the $30 billion would create or sustain more than 834,000 jobs.
The day after the hearing, the town received another e-mail from MAG stating, “Urgent Update: Opportunity for project submittals; MAG Regional Funding Amounts for Potential Economic Stimulus Legislation.”

Because member agencies were only provided a day or two to submit project information, NARC informed MAG there was now another opportunity to submit transportation and infrastructure projects to be added to the list compiled earlier in the week, giving MAG members until 9 a.m. on Monday, Nov. 3.

MAG’s e-mail reminded members that projects must be ready to start within three to six months.

For cost estimates, MAG said the current intention is to provide 100 percent federal funding for projects and local matches did not appear to be necessary at this point in the discussion.
Because Cave Creek is currently involved with major water, wastewater infrastructure and road improvement projects, Congress’ consideration of federal funding couldn’t come at a more opportune time.

However, Abujbarah said the town cannot count on that funding and is proceeding with projects as originally planned until it receives notification that other funding has been approved.

The Senate has not yet voted on HR 7110.

Photo: As development slowed last year and then screeched to a halt in September, leaving the town of Cave Creek with sales tax as its sole source of revenue, Town Manager Usama Abujbarah said the town had to make some difficult but necessary decisions last week as it laid off seven employees.Photo by Linda Bentley